Cloud computing to reach $70 billion worldwide

The number of new cloud-based solutions will triple in the next four to five years, according to new predictions from IDC.

The industry analysts says cloud, as one of the substantial transformative forces, is impacting all areas of IT supply, composition, and consumption and provides the basis for many of the big data, mobile, and social solutions.

IDC’s latest report, Cloud Computing: The Essential Foundation of Industry Digital Transformation — Worldwide and U.S. Cloud Forecast by Vertical, 2015–2019, examines the current status of cloud deployment in the context of different vertical industries, and identifies industry drivers and barriers of using cloud technology. The study presents insights in terms of how to leverage cloud computing to create new value.

IDC is predicting the public cloud computing will reach almost $70 billion in 2015 worldwide, with the top 5 verticals (discrete manufacturing, banking, professional services, process manufacturing, and retail) accounting for approximately 45% of the total spend for the market.

IDC says industry-specific applications will be a driving force as businesses look for solutions that can be easily configured to their unique business and vertical requirements.

“With the huge increase in the number and diversity of services available in the market, organisations across the industries will shift steadily toward cloud-first strategies to enable digital transformation,” the analyst firm says.

According to the study, the major opportunities for cloud within verticals come from the development of intelligent industry solutions, which are built on top of a new platform that includes cloud as well as big data and analytics, mobile, and social.

The new study provides a vertical forecast for three public cloud computing technologies, that being software as a service, platform as a service, and infrastructure as a service. Further, the study takes a look at two primary software markets for SaaS - applications and system infrastructure software –and one primary software market for PaaS — application development and deployment.

IDC says those IT suppliers that showcase the long-term benefits and the true value of the cloud as a platform in a given vertical (e.g., efficiency gains in business processes and improvement in customer acquisition/customer experience) will be most successful.

The study reveals the ease of purchasing cloud-based solutions has helped transfer buying power from IT to functional lines of business like marketing, finance, and operations.

Security and regulatory remains the biggest barrier for cloud adoption across industries like government and financial services, according to the study, while loss of perceived control over IT assets and massive legacy systems are also stumbling blocks for using cloud.

"The technological innovations and enabling capabilities unleashed by cloud have fostered new opportunities across the industries," explains Eileen Smith, programme manager, IDC Global Technology and Research Group.

"As a result, it is necessary for both technology vendors and buyers to recognise the industry drivers and barriers of cloud deployment, to understand the business transformation brought by cloud, and to act upon the changes that will shape business and technology strategy in the coming years."

IDC says that cloud services will remain the essential foundation of the IT industry's 3rd Platform of growth.

“As the cloud market enters an ‘innovation stage’, there will be an explosion of new solutions and value creation on top of the cloud,” Smith explains.

“IDC predicts that there will be more industry-specific cloud services platforms and marketplaces run by leaders in each industry seeking to attract communities of thousands of innovators to create valuable new services.”

Smith adds, “We have already seen such platforms and innovation communities in place in retail, financial services, media, and other industries.

“This will reshape not only how companies operate their IT but also how they compete in their own industry,” she says. “Technology suppliers will continue to see significant demand for their industry-specific solutions. It is important for these suppliers to develop strong customer-partner relationships with cloud/platform players to seize new opportunities.”